The next Contracts for Difference (CfD) round is set to be fiercely competitive as solar is allowed to compete for the first time in years.
Due to take place in 2021, Pot 1 technologies such as solar and onshore wind could make up nearly half of the competitors in Allocation Round 4 (AR4), according to analytics company Cornwall Insight.
The company’s Renewables Tracker found that there was 13GW of projects likely to compete, based on eligibility and when planning permission was submitted. Of these, 5.5GW are Pot 1 technologies.
The rest will consist of 6GW of offshore wind and ~1.0GW of Pot 2 technologies, of which a significant proportion will be Remote Island Wind (RIW).
James Brabben, wholesale manager at Cornwall Insight, said that the results were “revealing”, both from a commercial perspective and in terms of wider policy and network charging.
"The onshore wind capacity totals 4.2GW, a high figure considering the ~13GW in operation currently. Of this, over 3.8GW is in Scotland, highlighting the continued concentration of sites here.”
The group filtered down its calculated total pipeline of over 37GW across 800+ sites in the UK to find those most likely to bid. The research also revealed that the majority of projects were likely to be in Scotland.
Brabben added: “Although the auction is set to be a competitive one, the location of potential applications may cause other issues such as high Transmission Network Use of System (TNUoS) costs for larger sites in Scotland, differences in load factors and site conditions and wider financing and strategic factors at play from project sponsors.
"The pipeline may also change as we head through to 2021. Particularly as some sites continue to look at subsidy-free and merchant options instead, while new sites may also join the queue for the CfD."
The CfD auction was widely welcomed by the solar industry when it was announced at the beginning of March. Following the multiple changes to the subsidy landscape for solar, it was seen by many as a welcome commitment to the technology.
Ricardo Pineiro of Foresight told Solar Power Portal at the time that it was “encouraging and a step in the right direction for the UK to be able to hit the target of net zero emissions by 2050”.
Last week, the Department of Business, Energy and Industrial Strategy confirmed that the timeline for the auction will go ahead unchanged despite disruption due to COVID-19. There is currently a consultation underway, looking at potential changes to technology pots, an extension of the negative pricing rule and a relaxation of energy storage metering requirements.